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Royal LePage predicts rising recreational property prices

Royal LePage projects a steady climb in the prices of recreational properties across Canada, with the median price of a single-family home anticipated to increase by approximately five percent annually.

The Spring Recreational Property Report, unveiled by Royal LePage on Wednesday, forecasts a surge that would elevate median prices to $678,930 in 2024. Notably, Ontario is expected to witness the most significant uptick with an eight percent rise. This prognosis is underpinned by heightened consumer confidence, encouraging prospective buyers to re-enter the market, as outlined in the release.

Phil Soper, President and CEO of Royal LePage, remarked on the prevailing economic landscape, acknowledging the challenges posed by inflation and soaring interest rates. Despite these hurdles, Soper remains optimistic, emphasizing the enduring demand for recreational living. He anticipates a resurgence in activity within this market segment throughout 2024.

A survey encompassing 150 recreational real estate professionals underscored a notable trend: 41 percent reported diminished inventory compared to the previous year in their respective regions.

Royal LePage posits that interest rate reductions could inject vitality into the recreational property market. The release indicates that 62 percent of experts anticipate a slight uptick in demand post-rate cut, with an additional 21 percent foreseeing a significant surge.

Soper highlighted the role of cash in recreational property transactions, noting that although cash plays a substantial role, a majority of buyers still opt for financing. According to the survey, 78 percent of respondents indicated that buyers typically secure financing through loans or mortgages.

Contrary to the residential market, recreational property purchases appear less swayed by mortgage rates. However, Soper suggests that a reduction in the Bank of Canada's key lending rate, anticipated later this year, could buoy consumer confidence, potentially fueling an increase in both prices and sales.

The anticipated boost in activity is poised to exert upward pressure on prices. Soper anticipates a symbiotic relationship between heightened activity and increased inventory, which could further stimulate sales.

In summary, Royal LePage's forecast paints a promising picture for Canada's recreational property market, projecting steady price increases fueled by renewed consumer confidence and potential interest rate cuts.